I feel like the overall takeaway is very different though. I’ve not fully understood the details in either argument so this is a little vibes based. You seemed to be arguing that below subsistence wages were fairly likely while here it seems to be that even falling wages require a weird combination of conditions.
I think the conditions that support eventual below subsistence wages are fairly plausible, which is why I argued that the overall outcome is plausible. It appears Phillip Trammell either believes these conditions are less likely than I do, or decided to temporarily suspend judgement about their likelihood for the purposes of writing this post. Either way, while I agree the emphasis of our posts is different, I think the posts are still consistent with each other in a minimal sense.
I might be more pessimistic than you about wages on balance, since I would argue for the importance of the “reallocation of capital from labor-augmenting to non-labor-augmenting uses” point, which if strong enough could lower wages through a channel other than the DRS+PS one you focus on.
I feel like the overall takeaway is very different though. I’ve not fully understood the details in either argument so this is a little vibes based. You seemed to be arguing that below subsistence wages were fairly likely while here it seems to be that even falling wages require a weird combination of conditions.
What have I misunderstood?
I think the conditions that support eventual below subsistence wages are fairly plausible, which is why I argued that the overall outcome is plausible. It appears Phillip Trammell either believes these conditions are less likely than I do, or decided to temporarily suspend judgement about their likelihood for the purposes of writing this post. Either way, while I agree the emphasis of our posts is different, I think the posts are still consistent with each other in a minimal sense.
Right, I’m just not taking a stand here.
I might be more pessimistic than you about wages on balance, since I would argue for the importance of the “reallocation of capital from labor-augmenting to non-labor-augmenting uses” point, which if strong enough could lower wages through a channel other than the DRS+PS one you focus on.
Thanks, that’s very useful for me trying to follow but not that deep in the models!